It is anticipated that later this year a proposed Bill will be introduced into Parliament in relation to Off the Plan contracts in New South Wales.
If the Bill is passed as expected, then these changes will bring about:
- A new disclosure statement regime;
- Wider sunset clause protection for purchasers; and
- A 10 business day cooling off period (instead of the current 5 business day cooling off period).
The intention of this part of the Bill is to require the developers to provide a single document which clearly sets out all the required information in the relation to the proposed Off the Plan transaction, rather than the various pieces of information being buried inside the Contract for Sale, which can often run into several hundred pages.
Developers will need to prepare and issue a Disclosure Statement which includes the following information:
(a) whether or not the developer has obtained development approval;
(b) details of the proposed deposit holder;
(c) details of the sunset date (the date by which the Plan must be registered); and
(d) the anticipated settlement date.
The Disclosure Statement will be required to attach the following documents (which are usually attached to the Contract for Sale):
(a) the draft plan of subdivision;
(b) details of any easements and/or covenants to be registered on title;
(c) proposed by-laws (if any); and
(d) list of finishes (if applicable).
The developer will have an obligation to notify the purchaser of any changes made to the documents or information contained in the Disclosure Statement, in particular any changes to the draft plan, the calculation of unit entitlements (if applicable); and by-laws or management statement (if applicable).
The developer’s failure to notify the purchaser of any changes to the Disclosure Statement could entitle the purchaser to rescind the Contract or (in some limited circumstances) to make a claim for compensation.
Developers, purchasers and real estate agents will need to closely monitor the progress of the Bill to ensure that the relevant procedures are complied with when required.
If you are selling or purchasing a property off the plan and have any questions you can contact Gina Haramis by phone on 02 9525 8688 or by email at firstname.lastname@example.org